UK Intends to Reform Data Protection

On 10 May 2022, the UK government announced its intention to introduce a Data Reform Bill (the “Bill”). The announcement was made as part of the Queen’s Speech and did not come as a great surprise given changes to data protection in the UK had been rumoured for some time post-Brexit. The UK government summarises the purposes of the Bill, what it perceives to be its benefits and, amongst other things, the main elements of the proposed legislation, in its background notes for the Queen’s Speech.

By way of the Bill, the UK government intends to “create a world class data rights regime that will allow…[it] to create a new pro-growth and trusted UK data protection framework that reduces burdens on businesses, boosts the economy, helps scientists to innovate and improves the lives of people in the UK”, whilst also modernising the ICO and ensuring it has the powers it requires to enforce data protection, increasing participation in Smart Data Schemes and improving access to health and social data to help those in need of medical care.

In doing so, it believes it will increase the competitiveness and efficiencies for businesses with the reforms anticipated to generate more than £1 billion in business savings over 10 years (according to an analysis by the Department for Digital, Culture, Media and Sport). Amongst other benefits, the Bill will allow data to be used in a way that can empower citizens and improve their lives with regards healthcare, security and government services.

Echoing an opinion which is likely fairly widespread by experts and practitioners, the UK government also expressed its opinion on the GDPR and Data Protection Act 2018 stating that they are “highly complex and prescriptive pieces of legislation…that encourage excessive paperwork, and create burdens for businesses with little benefit to citizens.” In this respect, the UK government notes several times that it wants to remove “tick box exercises”.

Whilst the views of UK government and the goals of the Bill may resonate with, and be supported by, many working within data protection, this all suggests that fairly radical changes will be made to the current regime in the UK. Of particular note is that the Bill comes shortly after the UK being granted its adequacy decision from the European Commission, something the UK government has been keen to retain. Will the Bill may jeopardise this decision and have an adverse effect on organisations, specifically those operating in both the UK and EU? Only time will tell. A more flexible and efficient regime may in fact entice organisations to bring more business to the UK which, as the background notes suggest, is a key driver for the UK government to make these changes. We now await the UK government releasing a draft of the new Bill and, importantly, the reaction of the EU Commission and EU regulators.

EU Data Act raises data protection concerns, say regulators

Data protection regulators have called on EU law makers to place tighter controls on how personal data generated by the use of products and services can be used.

The European Commission set out plans to help consumers and businesses access data generated by the products or related services they own, rent or lease in a new EU Data Act proposed earlier this year. However, the European Data Protection Board (EDPB), together with the European data protection supervisor (EDPS), which oversees EU institutions’ compliance with data protection laws, has said the draft legislation raises data protection concerns.

In a joint opinion, the EDPB and EDPS called for the draft Data Act to be amended. They said the proposals should include “clear limitations or restrictions on the use of personal data generated by the use of a product or service by any entity other than data subjects, in particular where the data at issue are likely to allow precise conclusions to be drawn concerning their private lives or would otherwise entail high risks for the rights and freedoms of the individuals concerned”.

The EDPB and EDPS cited specific examples of data processing activities the draft Data Act should prohibit.

“In particular, the EDPS and EDPB recommend to introduce clear limitations regarding use of personal data generated by the use of a product or related services for purposes of direct marketing or advertising, employee monitoring, credit scoring or to determine eligibility to health insurance, to calculate or modify insurance premiums,” they said. “This recommendation is without prejudice to any further limitations that may be appropriate, for example to protect vulnerable persons, in particular minors, or due to the particularly sensitive nature of certain categories of data (e.g. data concerning the use of a medical device or biometric data) and the protections offered by Union legislation on data protection.”

Frankfurt-based data protection law expert Ruth Maria Bousonville of Pinsent Masons said that the insistence by the EDPB and EDPS that data protection law prevails in case of conflict with the Data Act was “obvious” and that the draft the Commission has prepared already confirms this. She said the text “would not benefit from additional detail in this respect.”

However, Bousonville said general comments the EDPB and EDPS made in their joint opinion are worth noting.

“Against common perception, they are highlighting that data protection law ‘already allows for’ the unleashing of ‘the potential of information to be extracted from data in order to gain valuable knowledge for important common values and for health, science, research and climate action’,” Bousonville said.

“Practice shows that each of such use cases turns on its own facts, which is why the Data Act cannot add legal certainty in this respect. At the same time, data protection law will prevent plain commodification of personal data even if the Data Act would allow it. So, in essence, businesses will need to be prepared for additional regulation without any clear advantage,” she said.

The Commission’s plans for a new Data Act would have major implications for manufacturers of connected devices and other data holders as they would be required to make data generated by their products and services “available to third parties upon the request of the user” and do so “under fair, reasonable and non-discriminatory terms and in a transparent manner”.

The Commission’s draft includes proposed safeguards for SMEs, including the potential unfairness that can arise in data sharing contractual provisions as a consequence of the imbalance in bargaining power between micro, small or medium-sized enterprises and larger businesses: larger businesses would be prohibited from taking advantage of their stronger negotiating power under the draft Act. In this context, the draft introduces an unfairness test. It defines in what cases data sharing-related contractual terms are unfair and is complemented by a list of clauses “that are either always unfair or presumed to be unfair”.

Data Privacy – Proactive not Reactive; Preventative not Remedial

With the shift from industrial manufacturing to knowledge creation and service delivery, the value of information and the need to manage it responsibly have grown dramatically. At the same time, rapid innovation, global competition and increasing system complexity present profound challenges for informational privacy.

While we would like to enjoy the benefits of innovation − new conveniences and efficiencies − we must also preserve our freedom of choice and personal control over our data flows. Always a social norm, privacy has nonetheless evolved over the years, beyond being viewed solely as a legal compliance requirement, to also being recognized as a market imperative and critical enabler of trust and freedoms in our present-day information society.

There is a growing understanding that innovation, creativity and competitiveness must be approached from a “design-thinking” perspective − namely, a way of viewing the world and overcoming constraints that is at once holistic, interdisciplinary, integrative, innovative, and inspiring.

Privacy, too, must be approached from the same design-thinking perspective. Privacy must be incorporated into networked data systems and technologies, by default. Privacy must become integral to organizational priorities, project objectives, design processes, and planning operations. Privacy must be embedded into every standard, protocol and process that touches our lives. This document seeks to make this possible by striving to establish a universal framework for the strongest protection of privacy available in the modern era.

The 7 Foundational Principles of Privacy by Design are presented below in Bold, followed by the FIPs principles that map onto each one.

Proactive not Reactive; Preventative not Remedial

The Privacy by Design approach is characterized by proactive rather than reactive measures. It anticipates and prevents privacy invasive events before they happen. PbD does not wait for privacy risks to materialize, nor does it offer remedies for resolving privacy infractions once they have occurred − it aims to prevent them from occurring. In short, Privacy by Design comes before-the-fact, not after.

Whether applied to information technologies, organizational practices, physical design, or networked information ecosystems, PbD begins with an explicit recognition of the value and benefits of proactively adopting strong privacy practices, early and consistently (for example, preventing (internal) data breaches from happening in the first place). This implies:

  • A clear commitment, at the highest levels, to set and enforce high standards of privacy − generally higher than the standards set out by global laws and
  • A privacy commitment that is demonstrably shared throughout by user communities and stakeholders, in a culture of continuous
  • Established methods to recognize poor privacy designs, anticipate poor privacy practices and outcomes, and correct any negative impacts, well before they occur in proactive, systematic, and innovative

Privacy as the Default

We can all be certain of one thing the default rules! Privacy by Design seeks to deliver the maximum degree of privacy by ensuring that personal data are automatically protected in any given IT system or business practice. If an individual does nothing, their privacy still remains intact. No action is required on the part of the individual to protect their privacy it is built into the system, by default.

 This PbD principle, which could be viewed as Privacy by Default, is particularly informed by the following FIPs:

  • Purpose Specification – the purposes for which personal information is collected, used, retained, and disclosed shall be communicated to the individual (data subject) at or before the time the information is collected. Specified purposes should be clear, limited and relevant to the
  • Collection Limitation – the collection of personal information must be fair, lawful and limited to that which is necessary for the specified
  • Data Minimization − the collection of personally identifiable information should be kept to a strict minimum. The design of programs, information and communications technologies, and systems should begin with non-identifiable interactions and transactions, as the default. Wherever possible, identifiability, observability, and linkability of personal information should be
  • Use, Retention, and Disclosure Limitation – the use, retention, and disclosure of personal information shall be limited to the relevant purposes identified to the individual, for which he or she has consented, except where otherwise required by Personal information shall be retained only as long as necessary to fulfill the stated purposes, and then securely destroyed.

Where the need or use of personal information is not clear, there shall be a presumption of privacy and the precautionary principle shall apply: the default settings shall be the most privacy protective.

Privacy Embedded into Design

Privacy by Design is embedded into the design and architecture of IT systems and business practices. It is not bolted on as an add-on, after the fact. The result is that privacy becomes an essential component of the core functionality being delivered. Privacy is integral to the system, without diminishing functionality.

Privacy must be embedded into technologies, operations, and information architectures in a holistic, integrative and creative way. Holistic, because additional, broader contexts must always be considered. Integrative, because all stakeholders and interests should be consulted. Creative, because embedding privacy sometimes means re-inventing existing choices because the alternatives are unacceptable.

  • A systemic, principled approach to embedding privacy should be adopted − one that relies upon accepted standards and frameworks, which are amenable to external reviews and audits. All fair information practices should be applied with equal rigour, at every step in the design and
  • Wherever possible, detailed privacy impact and risk assessments should be carried out and published, clearly documenting the privacy risks and all measures taken to mitigate those risks, including consideration of alternatives and the selection of
  • The privacy impacts of the resulting technology, operation or information architecture, and their uses, should be demonstrably minimized, and not easily degraded through use, misconfiguration or

Full Functionality – Positive-Sum, not Zero-Sum

Privacy by Design seeks to accommodate all legitimate interests and objectives in a positive-sum “win- win” manner, not through a dated, zero-sum approach, where unnecessary trade-offs are made. Privacy by Design avoids the pretence of false dichotomies, such as privacy vs. security, demonstrating that it is possible, and far more desirable, to have both.

Privacy by Design does not simply involve the making of declarations and commitments − it relates to satisfying all legitimate objectives − not only the privacy goals. Privacy by Design is doubly-enabling in nature, permitting full functionality − real, practical results and beneficial outcomes to be achieved for multiple parties.

  • When embedding privacy into a given technology, process, or system, it should be done in such a way that full functionality is not impaired, and to the greatest extent possible, that all requirements are optimized.
  • Privacy is often positioned in a zero-sum manner as having to compete with other legitimate interests, design objectives, and technical capabilities, in a given domain. Privacy by Design rejects taking such an approach – it embraces legitimate non-privacy objectives and accommodates them, in an innovative positive-sum manner.
  • All interests and objectives must be clearly documented, desired functions articulated, metrics agreed upon and applied, and trade-offs rejected as often being unnecessary, in favour of finding a solution that enables multi-functionality.

Additional recognition is garnered for creativity and innovation in achieving all objectives and functionalities in an integrative, positive-sum manner. Entities that succeed in overcoming outmoded zero-sum choices are demonstrating first-class global privacy leadership, having achieved the Gold Standard.

End-to-End Security – Lifecycle Protection

Privacy by Design, having been embedded into the system prior to the first element of information being collected, extends securely throughout the entire lifecycle of the data involved — strong security measures are essential to privacy, from start to finish. This ensures that all data are securely retained, and then securely destroyed at the end of the process, in a timely fashion. Thus, Privacy by Design ensures cradle to grave, secure lifecycle management of information, end-to-end.

Privacy must be continuously protected across the entire domain and throughout the life-cycle of the data in question. There should be no gaps in either protection or accountability. The “Security” principle has special relevance here because, at its essence, without strong security, there can be no privacy.

  • Security − Entities must assume responsibility for the security of personal information (generally commensurate with the degree of sensitivity) throughout its entire lifecycle, consistent with standards that have been developed by recognized standards development
  • Applied security standards must assure the confidentiality, integrity and availability of personal data throughout its lifecycle including, inter alia, methods of secure destruction, appropriate encryption, and strong access control and logging

Visibility and Transparency

Privacy by Design seeks to assure all stakeholders that whatever the business practice or technology involved, it is in fact, operating according to the stated promises and objectives, subject to independent verification. Its component parts and operations remain visible and transparent, to both users and providers alike. Remember, trust but verify!

 Visibility and transparency are essential to establishing accountability and trust. This PbD principle tracks well to Fair Information Practices in their entirety, but for auditing purposes, special emphasis may be placed upon the following FIPs:

  • Accountabilty – The collection of personal information entails a duty of care for its protection. Responsibility for all privacy-related policies and procedures shall be documented and communicated as appropriate, and assigned to a specified individual. When transferring personal information to third parties, equivalent privacy protection through contractual or other means shall be
  • Openness – Openness and transparency are key to accountability. Information about the policies and practices relating to the management of personal information shall be made readily available to individuals.
  • Compliance – Complaint and redress mechanisms should be established, and information communicated about them to individuals, including how to access the next level of appeal. Necessary steps to monitor, evaluate, and verify compliance with privacy policies and procedures should be taken.

Respect for User Privacy

Above all, Privacy by Design requires architects and operators to keep the interests of the individual uppermost by offering such measures as strong privacy defaults, appropriate notice, and empowering user-friendly options. Keep it user-centric!

The best Privacy by Design results are usually those that are consciously designed around the interests and needs of individual users, who have the greatest vested interest in the management of their own personal data.

Empowering data subjects to play an active role in the management of their own data may be the single most effective check against abuses and misuses of privacy and personal data. Respect for User Privacy is supported by the following FIPs:

  • Consent – The individual’s free and specific consent is required for the collection, use or disclosure of personal information, except where otherwise permitted by The greater the sensitivity of the data, the clearer and more specific the quality of the consent required. Consent may be withdrawn at a later date.
  • Accuracy – personal information shall be as accurate, complete, and up-to-date as is necessary to fulfill the specified
  • Access – Individuals shall be provided access to their personal information and informed of its uses and disclosures. Individuals shall be able to challenge the accuracy and completeness of the information and have it amended as
  • Compliance – Organizations must establish complaint and redress mechanisms, and communicate information about them to the public, including how to access the next level of

Respect for User Privacy goes beyond these FIPs, and extends to the need for human-machine interfaces to be human-centered, user-centric and user-friendly so that informed privacy decisions may be reliably exercised. Similarly, business operations and physical architectures should also demonstrate the same degree of consideration for the individual, who should feature prominently at the centre of operations involving collections of personal data.